"Mayor of London Boris Johnson was the only major politician to make a public stand for Britain’s financial services industry. Last week he told City A.M. that the EU “should stop butting in” on bankers’ pay and said the reforms could “undermine London’s international competitiveness”." - City AM

David Davis warns of "crisis" for Cameron if Tories lose Eastleigh - Telegraph

"David Cameron's leadership will be in crisis if the Conservatives come third in the Eastleigh byelection behind the Liberal Democrats and Ukip, the prominent rightwing Tory David Davis has warned. His remarks, before the critical by-election for the coalition partners, reflect Conservative concern that the main route to an overall majority at the next election will be blocked if Tories cannot capture a string of Liberal Democrat seats." - Guardian

Conservatives could finish third in the Eastleigh by-election - Telegraph

Ukip could challenge Lib Dems and Tories for second 'photo finish' predicted in by-election - Independent

Comment on Eastleigh:

Everyone's a winner if the Lib Dems win Eastleigh - Steve Richards in The Independent

Times leader (£): "If the Conservatives cannot capture a Liberal Democrat seat in circumstances in which the incumbent MP has pleaded guilty to a crime that may result in his being imprisoned, it begins to look difficult to see how the Conservative Party can improve on its 2010 performance."

The latest YouGov poll gives Labour a 43% to 32% lead but Cameron leads Miliband by 34% to 22% as best PM - PDF

Cameron yesterday launched a furious attack on the Labour candidate in today's Eastleigh by-election for his "appalling" wish that Margaret Thatcher had been killed by the IRA - Express

Clegg changes his story again on Lord Rennard

"Nick Clegg warned Lord Rennard four years ago to put a stop to his “inappropriate” behaviour towards women, it emerged yesterday. Mr Clegg also conceded that the former Lib Dem chief executive was effectively forced out of his job over concerns about sexual impropriety, and not just ill health as was stated at the time." - Times (£)

Matthew Parris in The Times (£): "Who can now doubt that if at the outset the Lib Dem leader had issued a one-sentence statement — “I have set up two inquiries to find out what, if anything, went wrong; I shall be making no further public comment until they report; meanwhile it must be noted that Lord Rennard continues to protest his innocence” — then he’d be in a better place now?"

From Lloyd George to Jeremy Thorpe, there's something in Liberal DNA that breeds sex scandals - Dominic Sandbrook in the Daily Mail

Clegg accused of ignoring formal requests for help from alleged sex abuse victims of the late Lib Dem MP, Cyril Smith - Guardian

More than 40% of councils in England are planning to increase council tax this year - BBC

Eric Pickles commented: "‘This survey confirms that council tax will effectively be frozen again this year, with an average change across England of just a mere 0.8 per cent. This is a tax cut in real terms." Quoted in the Daily Mail.

"Labour said the decision by so many councils to turn their backs on the Coalition’s offer to fund a freeze was an “embarrassment” for the Coalition. Clive Betts MP, the Labour chairman of the communities and local government committee, said the increase would be “difficult” to understand for hard-pressed families." - Telegraph

David Cameron pledged to go "further and faster" in reducing the deficit after the UK was stripped of its coveted AAA credit rating - Guardian

"In
a pre-Budget private meeting attended by about 80 backbench MPs, the
chancellor was repeatedly pressed to use any available money to cut
fuel, beer and air passenger duties, and green levies that force up
energy bills. Others pressed Mr Osborne to cut capital gains tax, at least
temporarily, to kickstart the housing market, while some Tory MPs have
also been urging the leadership to cut corporation tax for small- and
medium-sized businesses." - FT (£)

"The prime minister, who is a former smoker, told MPs that he was looking "across the piece" at ideas which could also include imposing a ban on smoking in cars when children are present. Cameron cited rules in Australia where tobacco companies are banned from placing their company logo on cigarette packets, which are instead covered with pictures of body parts diseased by smoking. These include colour photographs of feet damaged by gangrene and pictures of eyes blinded by smoking." - Guardian

David Cameron’s plans for a minimum price for alcohol will “penalise” responsible consumers without reducing problem drinking, according to the officials who would be expected to enforce the rules - Telegraph

David Cameron is holding talks with Latvian leaders in what is thought to be the first bilateral visit by a British prime minister to the country - Belfast Telegraph

Once written off, Republican moderates are finding voice again – at least on social issues - Heather Long in The Guardian

Martha Lane Fox told yesterday how she is to become the Baroness of Soho — and joked her peerage should get her “free cocktails and nipple tassels” - The Sun

And finally... David Cameron to be dropped from switching on Christmas lights in Witney because he is 'too costly' from a security point of view - Telegraph

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The Deep End: "To think out of the box, you first have to realise that there is a box. And this, in the end, is the tragedy of David Cameron's leadership of the Conservative Party and of the nation. By surrendering the origination and development of policy to the civil service, he had retreated into the furthest corner of the darkest box and closed the lid."

Troubles in Italy (and other poorly-led nations) benefit Britain... "UK
long-term borrowing costs have fallen to their lowest level this year,
as troubles in the eurozone offset worries over a fresh batch of credit
rating downgrades for government-backed institutions." - FT (£)

Italy's voters were rejecting the €uro - says the Daily Mail leader ...no, they weren't, says the FT (£): "Opinion polls show that support for the euro in Italy remains high."

"Europe's leaders are steadily dragging their joint economies towards depression, afflicting their competitive relation with the outside world possibly for ever..." ...and, writes Simon Jenkins in The Guardian, Italians said enough is enough.

"The reason Italy has been plunged into political chaos — and why world stock markets have plunged, too — is distressingly simple. Thanks to a proportional representation electoral system of the kind favoured by the hapless Nick Clegg, the balance of power in the Italian legislature is held by a party whose leader is a stand-up comedian. As a result, the third-largest economy in the eurozone appears for the moment to be ungovernable." - Simon Heffer in the Daily Mail

"David Cameron has presided over one of his most fiery cabinet meetings when a group of ministers demanded an end to "ringfenced" spending and two ministers were criticised for failing to promote growth measures." - Guardian

"Several ministers have started arguing that there should no longer be ringfencing for overseas aid, health and schools, although the Prime Minister has always insisted that these budgets will be protected until the end of the Parliament and into 2015-16." - Times (£)

Predicted reductions in MoD budget could lead to drastic measures such as axing another 15,000 jobs - Guardian | FT (£)

David Cameron and George Osborne have ordered ministers - notably Eric Pickles and Maria Miller - to do more to kickstart growth amid a Cabinet “blame game” about Britain’s flatlining economy - Independent

John Redwood sets out his economic recipe in an article for The Times

"A shortage of public borrowing is not the problem. What we lack is a strong private sector recovery. To produce that needs action to curb inflation, set realistic tax rates, and mend the banks more rapidly. Costly energy, poor transport, and a lack of electricity for the future are also issues in search of solutions that could assist growth." - John Redwood in The Times (£)

Some of the country’s most prominent historians have backed Michael Gove’s controversial new history curriculum

"In a letter to The Times (£) published today, 15 historians, including David Starkey, Antony Beevor and Niall Ferguson, write: “While these proposals will no doubt be adapted as a result of full consultation, the essential idea ... is a welcome one.”" - Times (£)

"In a significant escalation of hostilities between the former minister and his old colleagues at the Department of Education, he has used parliamentary procedure to question whether any formal complaints have been made about Dominic Cummings." - Independent

3,496 council-owned properties have been sold to tenants since the relaunch of Right-to-Buy last April, the highest number of sales for five years - FT (£)

The government is to announce the appointment of a chief social
scientist, who will co-ordinate a set of "what works" evidence centres
in Whitehall - The Guardian

If Nick Clegg’s story won’t stand up, the Lord Rennard scandal could finish him - Mary Riddell in The Telegraph

Only 11% of voters think Clegg "open and honest" over Lord Rennard scandal, 52% say not open and honest - Sun Politics

In his Times (£) column Daniel Finkelstein cools on the Coalition: "The Lib Dems have gone from constructive coalition partner to obstructive one... Nationally the Lib Dems talk pretty much only of how they are going to tax the rich more and resist further welfare reform."

Only a total Cleggectomy can save the Lib Dems now - Matthew Norman in The Independent

Labour will fight the next general election on a £25 billion pledge to retain Britain's independent nuclear deterrent - Independent

"He admitted that life in Iraq, where sectarian killings continue on a weekly basis, was not what he had hoped it would be following the downfall of Saddam Hussein. But he said that the situation would have been much worse if the dictator had been allowed to stay, describing him as 20 times worse than Bashar Assad of Syria." - Times (£)

We are luckier than we realise to have had Labour as our Left-of-Centre party - Dan Hannan at The Telegraph

MPs are to be spared the full impact of a rise in pension contributions paid by other public-sector employees - Daily Express

Why did it take so long to award campaign decorations to survivors of the Arctic convoys and Bomber Command? - Telegraph leader

The Pope is a pretty good role model for believer and unbeliever alike - Ann Widdecombe in the Daily Express

Leading American Republicans sign legal brief in favour of gay marriage - New York Times

And finally... (2) The gaffe-prone Mayor of London Boris Johnson has fought a losing battle with a sewing machine at a clothing factory before declaring the finished garment a "codpiece" - ITV

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City AM on the bleak election result in Europe's fourth biggest economy: "Italian voters left the Eurozone’s third biggest economy a gridlocked political mess yesterday, with a hung parliament clobbering the euro, spooking stock markets, and sending measures of volatility soaring. Pier Luigi Bersani’s centre-left bloc managed to win a majority in the lower house by dint of the electoral system’s generous winner’s bonus. But projections late last night suggested it would be Silvio Berlusconi’s centre-right alliance that took the top spot in the senate – though there is no rule that guarantees the winning coalition an overall majority in the upper house. And the emergence of comedian Beppe Grillo’s Five Star Movement as a major political force puts a further spanner in the works, as Grillo has promised never to work with other parties in a coalition."

"My advice to the coalition, to Labour and to the City: pay close attention to Italy’s dysfunctional, unpredictable election result: unless something big changes fast, it is the shape of things to come in Britain." - City AM's editor, Allister Heath

Changing their tune AGAIN, Liberal Democrats now say that Rennard was forced to quit as Chief Executive because of sex pest allegations

The Guardian: "Senior Liberal Democrats suggested for the first time on Monday that Lord Rennard had not stood down as the party's chief executive for health reasons, but after pressure from Nick Clegg's office and the then party president over general allegations of sexual impropriety."

The Daily Mail claims that FIVE specific complaints about Lord Rennard were made to Nick Clegg.

Liberal Democrat officials are to meet Metropolitan Police officers to discuss allegations made against the party's former chief executive Lord Rennard - BBC

The Liberal Democrats have removed control of a whistleblowing system from the wife of one of Nick Clegg’s key aides and handed it to an independent company - Telegraph

Rachel Sylvester says the Lib Dems' failure to recruit women to its Commons ranks means it is a male-dominated party and has allowed an "inappropriate culture" to develop - The Times (£)

The Telegraph invites the people of Eastleigh to punish the hypocritical Liberal Democrats

Telegraph leader: "Some Lib Dems have brushed this story off as an attempt to disrupt the Eastleigh by-election. In truth, it was the fact that Lord Rennard was permitted to return to public life, not least as a member of the party’s key policy committee, that taxed his accusers beyond endurance. The fortuitous timing should, however, give voters a chance to show precisely what they think of those who cast themselves as progressive crusaders for equality and justice, while failing lamentably to live up to those ideals."

Times leader (£): "Mr Clegg should also consider the questions that the affair has raised about the claim of the Lib Dems to be a serious political party."

The Rennard case exposes how the Lib Dems have lacked capacity to deal with all sorts of issues, including economic strategy and the NHS reforms - Steve Richards in The Independent

Marta Andreasen, the former UKIP MEP who has joined the Conservatives, will visit Eastleigh today and warn voters that only maria Hutchings can stop the Lib Dems keeping Chris Huhne's seat - Daily Mail

"For the first time in its monthly polls for The Independent, ComRes puts Nick Clegg's party in fourth place behind the UK Independence Party." | The Herald

Tory MPs all agree Labour is to blame for Britain losing its AAA rating - Donald Macintyre for The Independent

George Osborne's message to the Commons, quoted in The Express: “That is the choice for Britain – either we can abandon our efforts to deal with our debt problems and make a difficult situation very much worse, or we can redouble our efforts to overcome our debts and make sure this country can earn its way in the world.”

Ed Balls branded George Osborne the "downgraded chancellor", echoing the late John Smith's famous description of John Major in 1992 as a "devalued prime minister of a devalued government" after Black Wednesday - Guardian

Alex Brummer in the Daily Mail:
"Total state spending and borrowing has not been cut in absolute terms
at all. Indeed, the burden of debt, the accumulated amount of borrowing
made by governments down the years, is rising relentlessly. It was an
understanding of this stark truth that led to Britain losing its AAA
credit rating last week. The world’s market monitors finally lost
patience with our inability to control our borrowing and lack of
economic growth."

In carefully-worded blog John Redwood blames Coalition's tax, banking and infrastructure policies for lack of growth - John Redwood

Janan Ganesh in the FT (£): "Mr Osborne is likely to resist screams to “go for growth” – as though there were some lever that would bring economic vitality if only he would pull it – and prioritise his ailing deficit-reduction plan instead."

Michael Fallon, the business minister, has promised to cut red tape with “no more gold-plating” of European laws - Telegraph

"Campaigners will today deliver a letter to David Cameron criticising his ‘deeply shameful’ behaviour in backing NHS chief Sir David Nicholson. Patients First and Cure the NHS will accuse the Prime Minister of double standards for vowing to prosecute incompetent hospital staff but not the bureaucrats behind the system." - Daily Mail

Cameron vows to crack down on 'the benefits free-for-all' for migrants coming to Britain

"In a wide-ranging interview with the Daily Express, Mr Cameron also spoke of his “immense frustration” at working with Nick Clegg after his Liberal Democrat deputy reneged on a deal on reforming Parliamentary boundaries. He also vowed to keep Chancellor George Osborne in his post despite Britain losing its cherished AAA credit rating. But he reserved his strongest words for a pledge to go far further in cutting annual net immigration." - Express

A royal charter will deliver a genuinely independent regulator - Tory MP George Eustice who wanted a statutory press regulator endorses Oliver Letwin's compromise proposal in an article for The Guardian

A cap on bankers’ bonuses would be lunacy - Norman Lamont in The Telegraph

Boris Johnson has described members of the London Assembly as “great supine protoplasmic invertebrate jellies” after they ejected him from a meeting

"The Mayor of London, who is renowned for his flamboyant rhetoric, had been due to face a two-hour grilling by Assembly members over his £16.5 billion budget for next year, which includes cuts to the fire service and police. But Labour, Green and Lib Dem members voted to bypass the opportunity to question Mr Johnson because his deputy, Victoria Borwick, was not present for the opening statement." - Times (£)

"MPs said they were concerned that basic mistakes could be repeated in future projects such as the London to Birmingham high-speed HS2 scheme and the London Thameslink project." - Independent

Defence Select Committee concludes that too many "genuine complaints" about bullying, harassment, or sexual offences in the armed services are not being reported - BBC

Plans to reform Britain's arcane libel laws have been thrown into doubt after the House of Lords last night approved amendments introduced to the Defamation Bill by the film producer Lord Puttnam - Independent

Even if Iran gets the Bomb, it won’t be worth going to war - Jack Straw in The Telegraph claims that containment is a better response than conflict in dealing with a country we have long mishandled.

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Clegg insisted he didn't know about sex allegations against peer but now admits he ordered probe FIVE YEARS ago into 'non specific' claims of assaults - Daily Mail | Telegraph | Guardian

"Mr Clegg said he was made aware in 2008 of "indirect and non-specific concerns" about inappropriate behaviour towards women by the peer. The deputy PM said his office acted to deal with the allegations, which have been strongly denied by Lord Rennard." - BBC

"Initially the Deputy PM denied knowing the first thing about them until last Thursday. Yesterday, he admitted his office WAS told years ago, and that his own chief of staff was sent to grill Lord Rennard over them. So Clegg DID know." - The Sun Says

Commentators line up to slam the Liberal Democrats' and Nick Clegg's handling of the allegations...

Gaby Hinsliff in The Guardian: "The Lib Dems' handling of harassment claims has so far been shameful"This all bears a remarkable similarity to the way the BBC responded to the Jimmy Savile scandal

Melanie Phillips in the Daily Mail: "This all bears a remarkable similarity to the way the BBC responded to the Jimmy Savile scandal"

Stephen Glover in the Daily Mail: "Despite their pretence of being nice and enlightened, the Lib Dems are the nastiest, most hypocritical and most ruthless political party in modern British history."

Leo McKinstry in The Express: "Today the Lib Dems are accused of covering up the antics of an alleged sex-pest, just as they repeatedly covered up Charles Kennedy’s alcoholism during his leadership, even threatening journalists with libel suits if they dared to reveal his drink problem."

Independent leader: "Mr Clegg may protest that he was aware only of "general concerns" and that, without an official complaint, he could make no official move. But such sophistry is wholly inadequate."

Tory backbenchers call for Osborne to get serious about spending and cut taxes

The No-Turning Back Group will call for tax cuts: "David Ruffley, a leading member of the group, said: “Some of us would like him to cut public spending even more in order to fund tax cuts to inject a fiscal stimulus int o the UK economy at the Budget.”" - FT (£)

"David Davis, the former Tory leadership contender, argued that Mr Osborne, who has made the rating central to his austerity programme, had been undermined. “In part we are seeing the consequence of rhetoric outdoing reality. We have taken a tough position on spending cuts but we haven’t delivered it. We need to embark on a real cuts strategy,” he said. John Redwood, chairman of the Tory parliamentary economic affairs committee, said that the downgrade was a verdict on coalition policy and urged an immediate switch towards tax cuts and prioritised spending." - Times (£)

Tim Montgomerie: Britain deserved to be downgraded, the British political class simply isn't serious about cutting spending - The Times (£)

The loss of Britain’s AAA credit rating demonstrates that George Osborne must deliver on his economic strategy, not change it - Times leader (£)

The Chancellor is guilty of too much muddling through and not enough radicalism - Telegraph leader

Owen Jones sets out his Plan B in The Independent:
"Pushing growth through house-building, an industrial strategy and
genuinely publicly run banks; hiking taxes on the wealthy – who,
contrary to myth, studies show do not flee as a result; reducing welfare
spending by no longer subsidising private landlords and badly paying
bosses: here can be the basis of Labour’s alternative."

FT leader-writers (£) criticises Osborne's decision to highlight Britain's AAA rating: "While the hallmark of a triple A rating has symbolic significance, George Osborne is guilty of elevating it far out of proportion. He pinned his colours to the rating agencies’ mast by using the preservation of the triple A as a justification for austerity. If the downgrade shatters his credibility with voters, that is an unforced political error."

It would hardly be "surprising" if the Conservatives lost the
Eastleigh by-election, Ken Clarke has said, becoming the first Tory
Cabinet minister to publicly admit the prospect of defeat - Telegraph

Trevor
Kavanagh looks forward to the Eastleigh by-election campaign: "If the
Tories lose, they have only themselves to blame. The seat was there to
be taken the moment Huhne was caught fiddling his speeding points.
Instead they sat on their hands and picked Maria Hutchings as their
lacklustre candidate." - The Sun

One thing’s clear about Eastleigh: it’ll be a wretched day for Labour - Boris Johnson in The Telegraph

Don’t worry, there’ll be no flood of Romanians - Victor Ponta, Romanian Prime Minister, for The Times (£)

"Harriet Harman has signalled Labour’s willingness to reach an all-party agreement over Lord Justice Leveson’s proposals on press regulation, but warned Prime Minister David Cameron that “watered-down” plans would not be acceptable." - Scotsman

Spain's crisis could not have come at a worse moment - for her and for Europe - Rob Marchant for The Independent

Is marriage now just a middle-class institution? Today less than half of working class people wed but rates rise among high income earners - Daily Mail

"A friend of the politician said that the Conservative MP for Sutton Coldfield believes that the bike, with its distinctive basket, is too easily recognised after it appeared in the “plebgate” row he had with police in Downing Street. Since then, it has been targeted by thieves twice, while tourists and supporters have been stopping the MP to have their photograph taken with it." - Times (£) and the Huffington Post

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